Gold dipped on Thursday as the dollar strengthened, but losses were capped by continuing economic uncertainty around Britain's departure from the European Union and approaching French elections. The potential for the rise of the far right in European elections this year, along with British Prime Minister Theresa May formally triggering divorce proceedings from the EU on Wednesday has served to enhance gold's appeal as a safe-haven investment, negating some of the effects of a strong dollar.
"We might see support from the French elections if the first round surprises us by the results being better than expected for (far right leader) Marine Le Pen. That might give a little bit of a boost for gold," said Bernard Dahdah, a precious metals analyst at Natixis. Spot gold was down 0.5 percent at $1,245.41 an ounce by 1:54 pm EDT (1754 GMT) and US gold futures settled down 0.7 percent at $1,245.
"The market seemed to take the notification of the (triggering of) Article 50 in the UK relatively smoothly, but I suspect the worst is yet to come on that," said ANZ analyst Daniel Hynes. "But certainly, there was a tiny bit of safe-haven buying." In other precious metals, spot silver slipped 0.2 percent to $18.16 an ounce, having hit a four-week high of $18.29. Platinum turned down 0.06 percent to $950.95, while palladium was up 0.8 percent at $796.50.
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